At a time when merger and acquisition (M&A) activity was low in the UK, the South East has been revealed as the most active region for high growth companies,* according to a report by the leading law firm, Cripps.
The report analysed M&A activity and trends that affected high-growth businesses in the South East of England, and found they were involved in a total of 139 M&A transactions in 2023.
This put the South East in second place, behind London, for volume of deal completion.
Technology remained the most favourable sector with investors. Companies operating in the analytics, insights, and tools sector – which covers industries ranging from drug discovery to
AI platforms – represented 11% of M&A activity in the South East in 2023.
Food and drink processors saw a higher proportion of activity in the South East than
elsewhere in the UK, partly due to Kent being home to the highest proportion of food
and drink startups and scaleups in the South East.
The vast majority of M&A acquisitions of high-growth businesses were completed by
corporate acquirers, with trade sales accounting for 93.5% of M&A transactions in the South
East and professional investors (typically private equity funds) contributing to the remaining
6.47%.
While the majority of acquisitions were completed by UK companies, the US participated in the second highest number of acquisitions of South East businesses, acquiring nine companies in the region.
The research is the first in a series of M&A reports from Cripps that aims to provide insight into the challenges and opportunities facing high-growth companies across the UK.
Looking at the year ahead, there have already been three acquisitions of SE-based high growth
companies this year.
Salim Somjee, corporate partner at Cripps, said: “As a long-standing champion of ambitious, high-growth businesses in our region – as well as the UK and abroad – we are pleased to see that the South East is fertile ground for corporate transactions – even in the challenging conditions of 2023.
“We expect to see further M&A activity this year as some companies scale up, while others contend with macroeconomic headwinds.”
Image by Pete Linforth from Pixabay
